form10qexh104_121409.htm


     

    EXHIBIT
10.4

    
 

    BOND
PLEDGE AGREEMENT

     

    THIS BOND PLEDGE AGREEMENT
(“Agreement”), dated as of October 30, 2009 is between DCI, Inc., a Kansas
corporation (“Pledgor”), and UMB Bank, N.A., a national banking association (the
“Bank”).

     

    RECITALS:

     

    A.           The
City of Olathe, Kansas (the “Issuer”) issued an $820,000 aggregate maximum
principal amount of Taxable Subordinate Industrial Revenue Bonds (DCI, Inc.
Project) Series 2006D (the “Series 2006D Bond”), pursuant to that certain Trust
Indenture dated as of September 1, 2006 (the “Indenture”), between the
Issuer and UMB Bank, N.A., as Trustee.

     

    B.           Pledgor
purchased the Series 2006D Bond pursuant to a Bond Purchase Agreement dated
August 30, 2006, among Pledgor, as borrower, Pledgor, as purchaser, and the
Issuer.

     

    C.           Concurrently
herewith, the Bank is purchasing from Bank Midwest Issuer’s Tax Exempt
Industrial Revenue Bonds (DCI, Inc. Project) Series 2006A in the outstanding
principal amount of 3,333,997.52 (the “Series 2006A Bond”) issued pursuant to
the Indenture from Bank Midwest.

     

    D.           To
induce Bank to purchase the Series 2006A Bond, Pledgor has agreed to pledge the
Series 2006D Bond to Bank.

     

    NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereby agree as
follows:

     

    1.           Security
Interest.  To secure the payment and performance of Pledgor’s
obligations of every type and description arising under or related to the Series
2006A Bond (all such liabilities and obligations being herein collectively
referred to as the “Obligations”), Pledgor hereby grants, pledges, assigns,
hypothecates, transfers and delivers to Bank all of its right, title and
interest in and to the Series 2006D Bond and further grants Bank a security
interest in the Series 2006D Bond.  To perfect this security interest,
Pledgor agrees to deliver possession of the Series 2006D Bond to
Bank.

     

    2.           Representations, Warranties and
Covenants.  Pledgor represents, warrants and covenants
that:  (a) Pledgor will duly endorse, in blank, the Series 2006D Bond
by signing on the Series 2006D Bond or signing a separate Bond Power or other
document of assignment or transfer, if required by Bank, (b) Pledgor is the
owner of the Series 2006D Bond free and clear of all liens, encumbrances,
security interests and restrictions, (c) Pledgor will keep Series 2006D Bond
free and clear of all liens, encumbrances and security interests, except those
to Bank, and (d) Pledgor will not cause the Series 2006D Bond to be issued in
book-entry form while the Series 2006D Bond is subject to this
Agreement.

     

    3.           Default and
Remedies.  Each of the following occurrences shall constitute
an event of default under this Agreement (herein called an “Event of
Default”):  (i) Pledgor shall fail to pay any or all of the
Obligations when due or (if payable on demand) on demand or shall

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    default
under any material agreement governing the Obligations with Bank and the
expiration of any applicable cure periods without cure; (ii) an Event of Default
(as defined therein) shall occur under the Indenture; (iii) either Elecsys
Corporation, a Kansas corporation, or Pledgor shall voluntarily file or have
involuntarily filed against it a petition under the United States Bankruptcy
Code; or (iv) an Event of Default (as defined therein) shall have occurred and
is continuing under the Lease Agreement dated as of September 1, 2006 (the
“Lease Agreement”), between Pledgor, as lessee, and the Issuer, as
lessor.

     

    Upon the
occurrence of an Event of Default, the Pledgor agrees, upon the request of Bank,
to take all action necessary to transfer ownership of the Series 2006D Bond to
Bank without waiving any rights the Pledgor may have under the Uniform
Commercial Code, and Bank may collect, receive and realize upon the Series 2006
D Bond or any part thereof.  Additionally, Bank may exercise any and
all rights and remedies available against Pledgor upon default to a secured
party under Missouri law and the Uniform Commercial Code.

     

    5.           Waivers by
Pledgor.  None of the following acts or things (which Bank is
authorized to do or not to do with or without notice to Pledgor) shall in any
way affect or impair the security interest herein granted or Pledgor’s
liabilities and obligations hereunder:  (a) any extension or renewal
(whether or not for longer than the original period) of any or all of the
Obligations; (b) any change in the terms of payment or other terms of any
or all of the Obligations, or any substitution or exchange of any evidence of
any or all of the Obligations or collateral therefore, or any release of any
collateral for any or all of the Obligations; (c) the failure or neglect to
protect or preserve any Obligation or any collateral therefore, or to exercise
any right which may be available to Bank by law or agreement prior to or after
an Event of Default or any delay in doing any of the foregoing; (d) the failure
or neglect to ascertain or assure that the proceeds of any loan to Borrower are
used in any particular manner; and (e) the application or failure to apply in
any particular manner any payments or credits upon the Obligations.

     

    6.           Miscellaneous.  (a)
This Agreement can be waived, modified, amended, terminated or discharged, and
the Series 2006D Bond can be released only explicitly in a writing signed by
Bank.  (b) This Agreement shall terminate upon payment in full of the
Obligations or cancellation of the Series 2006D Bond.  Upon the
payment in full of the Obligations, Pledgor shall be entitled to the return,
upon its request and at its expense, of such of the Series 2006D Bond as shall
not have been sold or otherwise applied pursuant to the terms
hereof.  (c) Pledgor will reimburse Bank for all expenses, including
legal fees, incurred by Bank in the protection, defense or enforcement of this
Agreement, including expenses incurred in any litigation or bankruptcy or
insolvency proceedings of Pledgor.  (d) This Agreement shall be
binding upon and inure to the benefit of Pledgor and Bank and their respective
representatives, successors and assigns and shall take effect when signed by
Pledgor and delivered to Bank.  (e) THIS AGREEMENT SHALL BE GOVERNED
BY, AND BE CONSTRUED, ENFORCED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF MISSOURI (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING
TO CONFLICTS OF LAW).

     

    7.           Severability.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such

     


    
      
         


      

      
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    prohibition
or unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.

     

    8.           Time of the
Essence.  Time is of the essence in the interpretation of this
Agreement.

     

    9.           Bank Appointed
Attorney-in-Fact.  Pledgor hereby appoints Bank Pledgor’s
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor or otherwise, from time to time during the pendency of an
Event of Default in Bank’s discretion to take any action and to execute any
instrument which Bank may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation, to receive, endorse and
collect all instruments made payable to Pledgor representing any interest
payment or other distribution in respect of the Series 2006D Bond or any part
thereof and to give full discharge for the same.

     

    10.           Counterparts/Facsimile.  This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and
delivered shall be an original, but all of which shall together constitute one
and the same instrument.  The exchange of copies of this Agreement and
of signature pages by facsimile transmission shall constitute effective
execution and delivery of this Agreement as to the parties and may be used in
lieu of the original Agreement for all purposes.  Signatures of the
parties transmitted by facsimile shall be deemed to be their original signatures
for all purposes.

     

    [SIGNATURE
PAGE TO FOLLOW]

     


    
      
         


      

      
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    Agreed to
this 30th day
of October, 2009.

     

    


    
      	 
      	
              DCI,
      INC.

              By: 
      _________________________________                                                                

              Name: 
      _______________________________                                                                

              Title: 
      ________________________________                                                                

               

            
	 
      	 
      
	 
      	
              UMB
      BANK, N.A.

                    
                By: 
      _________________________________                                                                

                Name: 
      _______________________________                                                                

                Title: 
      ________________________________                                                           

              

               

            


    

    


    



    
      
         


      

      
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